This article is from the Australian Property Journal archive
STOCKLAND is increasing its exposure to the Perth market with the $53.5 million acquisition of the Brownes Dairy head office, processing and distribution facility.
The Brownes Dairy acquisition follows Stockland’s purchase of two residential land holdings in Perth for $58.1 million last week.
The 12 ha property is located at 22 Geddes Rd Balcatta, approximately 12kms north of the Perth CBD. The acquisition will generate an initial FFO yield of 7.5% and an initial underlying profit (post-AIFRS) yield of 9.7% per annum. The property has a long WALE of 20 years.
Stockland CEO commercial property John Schroder said Balcatta is one of the best industrial locations in the Western Australian industrial market.
“Brownes is Australia’s oldest dairy with an iconic, heritage brand and leading position in the WA dairy industry. It is a highly reputable and stable tenant and is committed to the site for at least the next 20 years, providing us with secure income and a very long WALE,” he added.
Stockland general manager industrial Tony D’Addona said the acquisition provides further development opportunities, with over 3.9 ha (38,500 sqm) of surplus development land available.
“We’re pleased to grow our exposure to the Perth market with the acquisition of this key industrial site.
“The Perth industrial market remains tightly held, which we believe will underpin rents and values going forward D’Addona said.
“We are making excellent progress implementing our strategy to grow our logistics and business parks portfolio. Quality acquisitions that meet our target returns, complement the strong organic growth opportunities we are capitalising on in our existing portfolio,” Stockland CEO Mark Steinert said.
“This is our third significant industrial acquisition in FY14, following purchases at St Marys and Ingleburn in Sydney,” he added.
The sale was negotiated by CBRE’s Matt Haddon and Warick Irving.
Haddon said the Brownes deal continues the current trend of sale and leaseback transactions, which provide industrial occupiers with the opportunity to recycle capital out of noncore property assets and back into their principal business activities.
Property Review